Terry Semel couldn’t be happier with the performance of Yahoo’s new search advertising system. The Yahoo CEO told an AdAge conference that Panama would show “some very exciting numbers” in the first quarter as they try to gain on Google. “We have said from the beginning and we say it clearly right now, again, that our intention is to close the gap and Panama is doing a great job,” Semel said.

Yahoo has disclosed for the first time it discards anywhere from 12 to 15 percent of clicks on its ads as either invalid or of inferior quality. To help fight click fraud, Yahoo promoted one of their attorneys, Reggie Davis, to a newly created post of vice president of marketplace quality. “We need to take some of the inconsistency out of this issue,” Davis told Reuters about the challenge of fighting click fraud.

The source of the anti-Hillary Clinton video spoofing Apple’s legendary ’1984′ advertisement has been identified. The Huffington Post identified Philip de Vellis, who has resigned his position with Internet company Blue State Digital in the wake of the controversy surrounding the ad. “I made the “Vote Different” ad because I wanted to express my feelings about the Democratic primary, and because I wanted to show that an individual citizen can affect the process,” De Vellis said on his blog.

Microsoft associate general counsel Tom Rubin has criticized Google over its “cavalier” approach to copyrighted materials. Rubin thinks Google breaks copyright law because it has “bestowed upon itself the unilateral right to make entire copies of copyrighted books”.

Yahoo shut down its Mixd group mobile service for the youth market. In what looks like a consolidation move, those users are being moved to Yahoo Mobile. Yahoo could integrate some of Mixd’s look into Mobile.

Terry Semel, Yahoo’s CEO, picked up a bonus of eight hundred thousand shares worth $25.7 million in 2006. For the year, Yahoo’s shares dropped 35 percent while they worked on building their new advertising system.

The global Internet audience has grown ten percent in the past year. ComScore Networks said 747 million people aged 15 and up used the Internet in January 2007. The United States and China have the top two Internet-using populations.

Yahoo has lagged far behind the leader in search advertising. Google has turned that lead into a market cap of one-hundred and fifty billion dollars, and plenty of profits.

The difference between the two companies has been ad relevance. Yahoo has placed ads in its search pages based on how much advertisers pay for that placement. Google has always delivered ads that depended as much on quality as one keyword price.

Yahoo is imitating that model, even if C-E-O Terry Semel declines to agree. Ahead of Panama’s launch, Yahoo has told its advertisers that the high bid won’t always win. If a slightly lower bid with a better quality score is in the mix, that ad may get the top ad spot instead.

Yahoo needs to turn its advertising fortunes around with Panama, and make its customers and investors happy with the new ad system’s performance. If they don’t show progress this year, Semel may be tossed out of his corner office.

Well known marketing professional Andy Beal said no one should be in a hurry to see Panama make an impact on the bottom line. It will take until March to get Panama rolled out completely. When it is operational, Yahoo will expect to see revenue closer to Google’s four and a half to five cents per click, instead of the two and a half to three cents it sees now.

Rafat Ali at Paid Content expects Panama to grow beyond the world of search advertising. He said:

“(Panama) is intended to be flexible enough eventually to handle video and audio ads and to distribute ads to mobile devices. And while Yahoo gives few specifics, it says Panama will some day play a role beyond search advertising.”

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Yahoo may expect Panama to smack down the threat of Microsoft and its Ad Center service. They better think again. Microsoft thinks Yahoo is arriving late to the party, and Ad Center took all of the door prizes with it when Microsoft left. Ad Center general manager David Jakubowski explained why to WebProNews:

“Yahoo is catching up with the rest of the industry, by only now adopting quality-based ranking. At the end of the day, Microsoft adCenter is continuing to push the industry beyond what is currently considered the gold standard.”

AdCenter Scoffs At Panama

Google may not have any plans to discuss about online advertising today, but they have plenty of buzz anyway. Thanks to a blogger’s discovery on the Google Docs and Spreadsheets service, we now know Google has another Office like product in the works. It’s called Presently, and will allow people to create slide-based presentations like they can do in PowerPoint. Google has since taken down the evidence that was discovered, but not before it was copied and spread to plenty of other web sites.

Google Works On PowerPoint Clone Presently

Google Prepares a Presentation Tool

Google Docs to support PowerPoint…

The business social network LinkedIn may be thinking of going public. Company co-founder Reid Hoffman stepped down from his C-E-O role in favor of former Intuit executive Dan Nye. Hoffman remains chairman and president of products for LinkedIn. Although some were surprised by the move, LinkedIn spokesperson Kay Luo said in a statement that Hoffman interviewed 72 candidates for the job over the past four months, so this was not a sudden change.

LinkedIn Loses CEO

LinkedIn

LinkedIn gets a new CEO, Hoffman LinksOut